Ukraine on Friday faced accusations from the West it had bowed to Russian pressure and missed a historic opportunity after the government scrapped plans to sign a deal to tighten ties with the European Union.
The decision sparked new protests in the politically volatile country, with nearly 3,000 marching through the fiercely pro-Western city of Lviv close to the border with the EU.
The government unexpectedly announced Thursday it was halting preparations to sign an Association Agreement with the EU at a summit in Vilnius next week, a deal which would have marked a historic break from Russia.
Russian President Vladimir Putin on Friday denied putting pressure on Ukraine to back out of the deal, saying it was instead the EU which was blackmailing Kiev.
"We've heard threats from our European partners against Ukraine ?- up to the point of helping them stage mass protests," Putin said.
"This is pressure. This is blackmail. And whether Ukraine and the Ukrainian leadership bow to this blackmail will be clear in the coming days."
Kiev announced its pullout from the EU deal after lawmakers failed to come up with legislation that would have allowed jailed ex-premier Yulia Tymoshenko, the arch foe of President Viktor Yanukovych, to travel to Germany for medical treatment, a key condition set by EU leaders for the agreement.
"This is a missed opportunity," British Foreign Secretary William Hague said in a statement, while EU foreign policy chief Catherine Ashton said it was a "disappointment" for both the EU and the people of Ukraine.
The US State Department lamented that there had been still "ample time" to resolve the remaining issues ahead of the summit.
The Ukrainian government said its decision was forced by national security concerns linked to trade problems with Russia.
'The last straw'
Prime Minister Mykola Azarov insisted before parliament Friday the decision was purely economic in nature and did not change Ukraine's strategy of EU integration.
"The decision was hard, but the only possible one in this economic situation," Azarov said to cries of "shame" from opposition lawmakers who promptly registered a vote of no confidence in his government.
Azarov said the "last straw" was the tough conditions imposed by the International Monetary Fund for extending a new credit to Ukraine to help its struggling economy.
On Friday, around three thousand marched through the pro-Western city of Lviv, chanting "Revolution" as drivers honked their horns in support, an AFP correspondent reported.
Around a thousand protested the decision late Thursday on Kiev's Independence Square, the hub of the 2004 Orange Revolution that forced the annulment of rigged presidential polls initially claimed by Yanukovych.
Waving Ukrainian and EU flags, several dozen stayed over until the morning, carefully watched by police who did not intervene.
The opposition led by boxing champion Vitali Klitschko, ultra-nationalist Oleg Tiagnybok and Tymoshenko ally Arseniy Yatsenyuk are calling another protest for Friday night and a mass rally on Sunday afternoon.
Tymoshenko on Friday urged supporters to take to the streets in protest, comparing the decision to the August Coup in the Soviet Union of 1991, her lawyer Sergiy Vlasenko told reporters.
The Kremlin, which wants Ukraine to join a Russia-led Customs Union, had threatened trade retaliation if Ukraine signed the deal.
Yanukovych had made a trip to Moscow earlier this month for secret talks with Putin.
A senior adviser to Lithuanian President Dalia Grybauskaite -- whose country holds the EU's rotating presidency -- said Russia had threatened to cut imports from eastern Ukraine.
"President Yanukovych cited these reasons during a telephone conversation with President Grybauskaite this week," Jovita Neliupsiene the adviser told AFP.
"Ukraine has not withstood economic pressure and blackmail."
The Association Agreement, which is seen as a first step to eventual EU membership, came with a major free trade deal that would have made Ukraine's membership of the Customs Union impossible.
EU envoys Aleksander Kwasniewski and Pat Cox, who visited Ukraine more than two dozen times to secure the deal, expressed "deep disappointment" at the "unilateral" decision of the Ukrainian government.
They warned that the "time-out formula" adopted by the Ukrainian government "is likely to last for a considerable time".
EU officials have warned that failing to sign the agreement in Vilnius will close a window that may not open again for several years, with the EU Commission set to be renewed in 2014 and Ukraine facing presidential elections in 2015.